Correlation Between Kandy Hotels and BROWNS INVESTMENTS
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By analyzing existing cross correlation between Kandy Hotels and BROWNS INVESTMENTS PLC, you can compare the effects of market volatilities on Kandy Hotels and BROWNS INVESTMENTS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kandy Hotels with a short position of BROWNS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandy Hotels and BROWNS INVESTMENTS.
Diversification Opportunities for Kandy Hotels and BROWNS INVESTMENTS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kandy and BROWNS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kandy Hotels and BROWNS INVESTMENTS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROWNS INVESTMENTS PLC and Kandy Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kandy Hotels are associated (or correlated) with BROWNS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROWNS INVESTMENTS PLC has no effect on the direction of Kandy Hotels i.e., Kandy Hotels and BROWNS INVESTMENTS go up and down completely randomly.
Pair Corralation between Kandy Hotels and BROWNS INVESTMENTS
Assuming the 90 days trading horizon Kandy Hotels is expected to generate 1.14 times more return on investment than BROWNS INVESTMENTS. However, Kandy Hotels is 1.14 times more volatile than BROWNS INVESTMENTS PLC. It trades about 0.03 of its potential returns per unit of risk. BROWNS INVESTMENTS PLC is currently generating about -0.02 per unit of risk. If you would invest 750.00 in Kandy Hotels on August 27, 2024 and sell it today you would earn a total of 130.00 from holding Kandy Hotels or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.35% |
| Values | Daily Returns |
Kandy Hotels vs. BROWNS INVESTMENTS PLC
Performance |
| Timeline |
| Kandy Hotels |
| BROWNS INVESTMENTS PLC |
Kandy Hotels and BROWNS INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandy Hotels and BROWNS INVESTMENTS
The main advantage of trading using opposite Kandy Hotels and BROWNS INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandy Hotels position performs unexpectedly, BROWNS INVESTMENTS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BROWNS INVESTMENTS will offset losses from the drop in BROWNS INVESTMENTS's long position.| Kandy Hotels vs. COMMERCIAL BANK OF | Kandy Hotels vs. Convenience Foods PLC | Kandy Hotels vs. Sampath Bank PLC | Kandy Hotels vs. HVA Foods PLC |
| BROWNS INVESTMENTS vs. Softlogic Life Insurance | BROWNS INVESTMENTS vs. Eden Hotel Lanka | BROWNS INVESTMENTS vs. Kandy Hotels | BROWNS INVESTMENTS vs. Browns Beach Hotels |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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